Is your credit score stopping you from renting a property? : Tips for Tenants

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Importance of Credit Scores

Credit scores are becoming more and more critical in today’s society. Suppose you have no credit or credit card debt. That is how credit scores you usually get low credit scores. The lower your credit score, between 300 and 579, the harder it is to rent an apartment in a city that considers credit scores when renting. 

Most landlords and property management firms use a credit check as a part of renting process. An owner or property manager checks a tenant’s credit score to reduce the chances of falling behind. They see your credit score as a powerful indicator of your expectations throughout the lease. Depending on your credit score and the property requirements, that credit examination might get the application rejected.

So, is your credit score stopping you from renting an apartment? Here are some tips for the tenants to tackle the problem. 

  • Be honest about your situation.

Sometimes, a bad credit score is not the result of bad financial management. It can be due to a sudden job loss, a medical emergency, or any inevitable family situation. If you are honest and comfortable sharing the reasons for a bad credit score with your landlord, share your present situation even before the landlord does the credit check. It helps to show the landlord the efforts you have taken and are currently taking to solve the issue. Thus, this will show the landlord you are responsible and dedicated, even if your credit score is not perfect. 

  • Find a guarantor or co-signer. 

Asking a friend or a relative with suitable credit history to act as a guarantor can pave the way for the landlord to sign the application for rent. You will need your guarantor or co-signer to sign a document committing them to pay the rent and pay for any damages done to the property. Hence, the co-signer is fully liable for missed payments or other expenses. You need to have a good relationship with this co-signer because the landlord can sue you and your co-signer if something happens. If you do not have a friend or relative, you can ask; some companies offer a guarantor service. You pay a fee, and these companies act as your guarantor.

  • Paying more up-front

A security deposit or advanced rent is one method landlords use to compensate for the risk of renting out their property. You can ease the landlord’s concerns by paying a month in advance or providing a two-month security deposit. The extra cash gives the landlords extra money to cover losses and damages. 

  • Opt for a shared house.

Renting a property without a credit check can be accomplished by living in a shared house or finding roommates with good credit scores. Rather than signing a new contract with the landlord, these rentals already have tenancies, so occupants fill the vacancy when someone moves out. All housemates are jointly accountable for the rent, and hence the rent payment is not an issue if you have a poor credit score. Also, there is the benefit of sharing the utility bills leading to a less financial burden, and hence you can pay off your debts faster. 

  • Show a solid income.

Even though your credit score is not impressive, showing that you have a solid income to the landlords can help in the renting process. When applying for an apartment, be ready with the proof of income and a letter from your employer. Suggesting having your rent automatically deducted from your bank account can also help. Moreover, a recent credit report and a recent check on the credit score can help you understand more about your financial situation. 

  • Bring recommendations and positive references.

Letters of recommendation and positive references ensure a potential landlord that you are a responsible person. It would be good to get positive notes or receive favorable recommendations from current and past employers, current and previous landlords, and even old roommates who can certify your character.

  • Try finding a private landlord.

Independent landlords do not carry out credit checks as they are expensive. Hence, you can find a private landlord via Facebook groups or websites. It’s also good to ask your friends or family for any recommendations.

  • Consider waiting

If you do not want to proceed with any of the above options, consider waiting until your credit score improves to get your dream apartment. You can raise your credit score through numerous methods, such as paying down debts, keeping credit card balances low, and gaining access to someone else’s account as an authorized user.

Contact Dana MacRae today for a free consultation if you need any advice to pay off your debts or a credit counseling session.